"One option would be to provide more explicit guidance about the period over which the federal funds rate and the balance sheet would remain at their current levels"An explicit inflation target? Lots of countries already use this. And it would mean less QE would be done if inflation expectations are anchored. Nothing new here."Another approach would be to initiate more securities purchases or to increase the average maturity of our holdings. "More open market operations, but long term instead of short term treasuries. Nothing radical there. "The Federal Reserve could also reduce the 25 basis point rate of interest it pays to banks on their reserves, thereby putting downward pressure on short-term rates more generally. "Reduce it to zero it'll be back to normal? What madness!
People like Bernanke are "Mad Men"
"Of course, our experience with these policies remains relatively limited, and employing them would entail potential risks and costs."Yet, they'll keep on doing it anyway.
I wonder what happens if the Bernank tries to lower the IOER and somehow, something goes wrong. How fast can one multiply 1.5+ trillion dollars into an economy?
HPX, that's the 65 Trillion dollar question, isn't it?
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